Fuel costs at farm level are set to come in at being between 6% and 7% higher for 2018 compared to last year, according to Teagasc’s Situation and Outlook July 2018 report.
The mid-year update, which was published yesterday (Tuesday, July 31), details the rising input costs that farmers in all sectors are facing this year relative to 2017.
Also Read: Dairy farm incomes likely to drop by 50% in 2018 – TeagascAccording to the report, while fuel and electricity are less significant inputs than some other items, the price of energy has implications that extend throughout the economy given the importance of energy as a cost item in the production and distribution of goods.
Oil prices have been on the rise since the middle of 2017, as the Organization of Petroleum Exporting Countries (OPEC) and Russia have imposed more control over global oil supplies, the document notes.
It was highlighted that the monthly average price for crude oil passed the $50/barrel mark in July 2017, hitting $60/barrel by November.
In addition, European natural gas prices have moved sharply upwards since September 2017, albeit from a relatively low level. This is due to tighter supplies on the EU market and the rising price of oil.
At farm level, it is estimated that fuel costs will be 6% to 7% higher in 2018 relative to 2017, the rapporteurs say.
The report reassures, however, that whilst farmers have seen fuel prices rise since this time last year, fuel prices remain well below the highs seen from 2012 through to 2014.